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On September 16, 2014, New York courts announced rules banning collecting consumer debts which were: a.) not incurred; b.) previously paid; or c.) subject to statute of limitations defenses.
The new rules require:
a.) creditors submitting affidavits for default judgments with detailed proof;
b.) that default applications contain the debtor’s original credit agreement, a detailed accounting of each stop in the debt’s chain of ownership and documentation that identifies the target of the default judgment as the correct debtor;
c.) an affidavit from the creditor’s attorney that the statute of limitations has not expired;
d.) verification of the efforts made to notify the debtor of the impending default.
These rules appear to apply only to credit card debt.
The new rules are effective October 1, 2014, except for purchased debts. There, requests for default judgments for debts purchased from the originating creditor on or after October 1, 2014, are effective July 1, 2015. The new requirements for affidavits seeking default judgments apply to all purchased debt, regardless of when it was purchased.
We will keep you apprised as information on these rules and their implementation develop.